Jurisdiction(s):
United Kingdom

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Key definition

VAT definition

What does VAT mean? VAT is a consumption tax on most supplies of goods and services made by taxable businesses to businesses or consumers. In practice, it underpins pricing (plus VAT), invoicing, cross‑border trade and many property transactions. The charge and key concepts are set out in the UK Value Added Tax Act 1994 and, in Ireland, the Value‑Added Tax Consolidation Act 2010 (implementing the EU VAT Directive). In Northern Ireland, EU VAT rules continue to apply to goods under the Windsor Framework; services follow UK rules. Core features include: output tax charged at standard, reduced or zero rates; exempt supplies (for example, certain...

VAT on Litigation Costs: Entitlement, Disbursements, Barristers’ Fees, Tax Points and Assessment under CPR PD 44 (England and Wales)

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Practice notes

This Practice Note sets out the particular rules governing vat on costs that fall to be the subject of either summary or detailed assessment before the High Court. The applicable provisions are contained in CPR PD 44.

Entitlement to

This is addressed at CPR PD 44, para 2.3 through to CPR PD 44, para 2.6. The party seeking recovery of costs bears responsibility for ensuring that VAT is claimed only if, and only to the extent that, it cannot recover from HMRC the VAT it has incurred (CPR PD 44, para 2.4).

if the VAT is recoverable from HMRC, it should not be included in a claim for costs
if only a proportion of the VAT is recoverable from HMRC, include only that proportion which is not recoverable from HMRC in the claim for costs

The legal adviser’s VAT registration number must appear in a prominent position at the head of every statement, bill of costs, fee sheet, account or voucher on which VAT is included as part of the claim for costs (CPR PD 44, para 2.2). Many parties have litigation costs insurance that can be used towards payment of an adverse costs award...

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Hartley Foster

Addington Chambers

Hartley has specialised in contentious tax matters for over 20 years. During that time, he has acted on over 60 reported cases, including 4 House of Lords / Supreme Court cases and 5 references to the CJEU. He focuses on the technical and tactical management of enquiries by HMRC; and he uses his litigious experience to negotiate with and pressurise HMRC into conceding issues and agreeing settlements. His experience also includes setting up and managing Group Litigation Orders. Hartley is a regular conference speaker and contributor to a number of publications; he writes and speaks particularly on the tax appeals system and international tax law. He is regularly asked by the media to comment on tax matters, with his comments having been published in many newspapers and a number of trade...

Web page updated on 22/05/2026

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